Friday saw ING highlight 7 things.......>

MARKET TALK: Friday saw ING highlight 7 things learnt from the latest flow data:

- 1) Following dramatic EM outflows & price falls as Covid-19 unfolded, some

inflows have resumed in recent weeks. Most of this into hard currency products.

- 2) Retail still a seller of EM local FX, was biggest seller in Mar. Evidence

of flows back into Turkey/S Africa, but no clear evidence of Brazil inflow.

- 3) There was a classic elevation in default risk in high yield as economies

jumped to recessionary state, oil price collapse was an additional stress

factor.

- 4) However, fast forward to more recent weeks and there has been an implied

re-rating of prospects in high yield, and in particular in the USD space.

- 5) Too early to tell if sustainable, default risk elevated & will become more

acute beyond Sep when most of the Fed's support facilities are due to roll off.

- 6) There has been an increase in short duration govies & money market fund

holdings, and an increase in corporate holdings along the maturity spectrum.

- 7) Holdings of inflation linked bonds are well down.